NYC L train shutdown cancelled and rents will soar, experts say

NYC L train shutdown cancelled and rents will soar, experts say

If the L train’s impending closure and resulting tricky commute was discouraging you from moving to Williamsburg, news that it is staying open after all might actually be a bigger deterrent.

On Thursday, New York Gov. Andrew Cuomo announced that the city’s L train, which is one of the main transit connections between parts of Brooklyn and Manhattan, would no longer be closing for 15 months as previously planned, The New York Times first reported.

Officials had said in 2016 that the L train would need to be shut down starting in April so that the MTA could repair flood damage left over from Hurricane Sandy. 250,000 people commute via the L train daily.

Cuomo said that the city would be using a new technology that has been used in Europe for tunnel construction to avoid having to fully close the line.

While this may come as good news to some residents of Brooklyn who were concerned over how they would be able to make the commute without the L train, the change in plan could drive up rental prices substantially.

A recent report from real-estate-listings site StreetEasy indicated that landlords in Williamsburg — one of the areas impacted by the planned L train closure — had been slashing rents to entice new residents as others relocated.

The monthly costs of 48% of Williamsburg apartments relisted on StreetEasy in June were lower than their rents two years earlier, with an average reduction of $250, the report showed.

Rents in some buildings dropped by as much as $400. According to StreetEasy’s analysis, the largest drop was at 44 Berry Street, where rents were down by $448 on average. The landlord for that building did not immediately return Business Insider’s request for comment.

“Look for rents to rise sharply as many who thought they were forced to look elsewhere adjust to the new reality of minimal disruption,” StreetEasy’s senior economist, Grant Long, said in a comment emailed to Business Insider on Thursday.

Long said that rents in North Brooklyn have fallen a cumulative 1.5% since the shutdown was first announced in April 2016, while rents in the rest of the borough have increased by a cumulative 3.3%.

For those who have already renegotiated their leases and secured cheaper rent in the areas that would have been affected by the shutdown, the announcement on Thursday should come as good news, Long said.

“Renters who have managed to negotiate deals in recent months have struck gold,” he said.

“I think some people got a very nice, happy new year gift; they got very lucky,” Dave Maundrell, executive vice president of new developments for Brooklyn and Queens at brokerage firm CitiHabitats, told Business Insider on Thursday.

Maundrell said that since these leases are legally binding, it’s the landlords who are going to have to take it on the chin.

He added that CitiHabitats informed its offices in the area on Thursday to stop offering concessions to apartment seekers, such as one to three months’ free rent, until the company has spoken to landlords.

“Concessions are probably going to get reduced quickly,” he said. “And when leases expire, previous concessions are going to burn off without question.”